Saipem Probed Over $60Million Petrobras Deal

Brazilian authorities are investigating the Italian oilfield services provider Saipem’s dealings with Petrobras over possible irregularities.

Saipem last week said its French and Brazilian subsidiaries had been informed by the competent Brazilian administrative authority (Controladoria-Geral da União through the Corregedoria-Geral da União) about the opening of administrative proceedings over a contract Saipem won with Petrobras in 2011.

The contract valued “about Brazilian Reais 249 million, currently equivalent to about Euro 56 million” was for the installation of the underwater gas pipeline connecting the Lula and Cernambi fields in Santos Basin.

Saipem said its subsidiaries would cooperate in the administrative proceedings by providing all the clarifications requested by the competent administrative authority. The company said it had “confidence in the correctness of the award” of the Lula and Cernambi contracts and it said it believed “in the absence of circumstances to affirm the administrative liability of the companies.”

According to the 2011 announcement of the contract, the deal included the development of the gas export pipeline Lula NE – Cernambi, in the Santos Basin Pre-Salt Region, approximately 270 kilometers off the coast of the State of São Paulo.

The development encompassed the engineering, procurement, fabrication and installation of a gas export pipeline 18 inches in diameter and 19 kilometers long, and related subsea equipment, which will be laid in a maximum water depth of 2,200 meters.